Fury as new HS2 boss to be paid nearly £600,000 a year

The under-fire £50 billion HS2 high-speed rail project is to get a new
chairman in the New Year – on a package equivalent to nearly £600,000 a
year.

Australian-born Sir David Higgins is being paid the equivalent of £591,000 a year - the same as his salary at Network Rail - nearly twice as much as Mr Oakervee, who was on the equivalent of £312,000 a year.Photo: REX

Sir David Higgins, Network Rail’s current chief executive and former chief executive of the UK’s Olympic Delivery Authority, takes over in March next year.

The news came amid fresh doubt about whether the £50billion High Speed 2 rail link will be built on time and to its revised budget.

Danny Alexander, the Chief Secretary to the Treasury, suggested that a new law to ensure it is built on time might not be passed by Parliament before the next election. This would make it easier for the next administration to scrap the scheme if it wished.

Separately a new report also questioned claims from ministers that the scheme could be justified because it would make trains less crowded. Sir David will take over from Douglas Oakervee as chairman, who stands down at the end of the year. Alison Munro will remain as chief executive.

He said his main priority was to ensure costs were kept under control. His appointment as chairman will be seen in the transport industry as an attempt by the Government to regain the initiative.

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Sir David, 58, made his reputation as one of the architects of the successful 2012 Olympics, delivering the infrastructure on time and on budget.

Australian-born Sir David is being paid the equivalent of £591,000 a year - the same as his salary at Network Rail - nearly twice as much as Mr Oakervee, who was on the equivalent of £312,000 a year.

However the financial arrangements will be complicated. He will be paid £950 a day when he starts as chairman for one day a week at the beginning of the year

For six months starting in March Sir David will be full time chairman, for which he will be paid £295,000. He will then cut his commitment to three days a week, for which his annual salary will be £240,000.

Value for money campaigners attacked the deal. Matthew Sinclair, Chief Executive of the TaxPayers' Alliance said: "Hard-working families don’t pay their taxes to fund gold-plated deals for the public sector top brass.

"The case for HS2 has fallen apart so the scale of this massive pay award is particularly shocking. It's time for the Government to scrap this white elephant and cut taxes for hard-working families instead.

"It smacks of desperation that the Government has had to bring in this supposed trouble-shooter to take charge of HS2."

Sir David's appointment came as doubts emerged that the HS2 Hybrid Bill, which will give the Government powers to ensure the line is built, will be law by the 2015 election.

The Bill is necessary to address the environmental impact of the route ad how this will be mitigated. But Mr Alexander hinted that ministers might not be able to hit a target of passing the Bill into law by Spring 2015.

He told an engineers’ conference said the Government’s “intention is to get the Hybrid Bill well on its way during this Parliament. We would certainly like to get it as far as possible during this Parliament.”

One questioner asked what was likely to happen to the Bill if there was a change of government, but Mr Alexander repeated: “It is our intention to get it (the Bill) through this Parliament.”

If the Bill is not law by May 2015 it will make it easier for a future Labour Government to scrap HS2 altogether. In the past few days, Labour has appeared to be cooling towards the scheme.

At the Labour conference shadow chancellor Ed Balls questioned whether it might be better for the money to be spent on other schemes.

Labour also said on Wednesday that would merge HS2 and Network Rail should it win power. HS1 - which runs the line from London to the south coast - is now owned by a Canadian consortium, half Ontario teachers and the other half Borealis Infrastructure

Ministers are increasingly on the back foot over the plans. Earlier this month MPs on the all-party Public Account Committee warned the 351-mile railway line from London to Manchester and Leeds faced spiralling costs and dwindling benefits.

Patrick McLoughlin, the transport secretary, admitted that the Government had messed up the PR over the high speed two rail route.

He said that it had been “wrong” to emphasise the saved journey times and instead he wanted to stress how HS2 could cut congestion on the network.

A separate report from the TaxPayers’ Alliance today questioned Mr McLoughlin’s claim that HS2 was not needed to increase capacity.

The alliance found that the West Coast Main Line, which HS2’s route will shadow, is one of the network’s least over-crowded routes, and that many towns and cities in the Midlands will get a worse service once the HS2 line is constructed.

Instead suggested capacity on the West Coast Main Line could be increased by reducing the number of first class carriages and increasing the length of trains.